Bolivia - Eastern Lowlands : Natural Resource Management and Agricultural Production Project (Vol. 2 of 2) : Project implementation annexes

Document of The World Bank FOR OFFICIAL USE ONLY CZ~g. z,Iq-'2c' Report No. 8101-BO STAFF APPRAISAL REPORT BOLIVIA EASTERN LOWLANDS: NATURAL RESOURCE MANAGEMENT AND AGRICULTURAL PRODUCTION PROJECT VOL-. W PROJECT IMPLEMENTATION ANNEXES FEBRITARY 20, 1990 Country Department III Latin America and the Caribbean Regional Office This document has a restricted disribution and may be used by eipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY AND EQUIVALENT UNITS Currency Unit - Boliviano (Bs) Exchange Rate Effective December 31, 1989 US$1.00 Bs 3.00 US$0.33 = Bs 1.00 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS ADP - Agricultural Development Project ANAPO - National Association of Wheat and Oil Seed Producers BAB - Bolivian Agricultural Bank BCB - Central Bank of Bolivia CAO - Agricultural Chamber of Commerce for the Orient CIAT - Tropical AjricuWture Research Center CIDOB - Organizatio:a of the Indigfnous Peoples of the Bolivian Orient COMEX - Export Complex of ANAPO, Ltd. CORDECRUZ - Santa Cruz Regional Developmert Cooporation ENFE - Bolivian National Railway FEGASACRUZ - Livestock Federation of Santa Cruz FENCA - National Federation of Rice Cooperatives FINDESA - Santa Cruz Development Finance Corporation MACA - Ministry of Agriculture PROMASOR - Association of Maize and Sorghum Producers FISCAL YEAR January 1 - December 31  zl ALL ,4 Y BOLIVIA EASTERN LOWLANDS: NATURAL RESOURCE MANAGEMENT AND AGRICUTLTURAL PRODUCTION PROJECT STAFF APPRAISAL REPORT Table of Contents Page Number I. CREDIT AND PROJECT SUMMARY .............................. 1 II. THE AGRICULTURAL SECTOR ................................. 4 Structure and Performance ............................... 4 Land Policy Framework ................................... 5 The Eastern Lowlands Region ......7 ...................... Potential for Sustained Agricultural Production and Export Growth in the Eastern Lowlands ................. 9 Bank/IDA Strategy in the Agricultural Sector and in the Eastern Lowlands ............................... 13 III. THE PROJECT ............................................. 14 Rationale for Bank/IDA Participation .................... 14 Project Objectives ..... . ................................ 15 Project Area .15 Project Description .16 Detailed Features .16 Project Costs .23 Pnroject Financing .23 Procurement ............................................ 24 Disbursements ......................................... 24 Accounts and Audit ................ I ..................... 25 Organization, Management and Implementation .26 Project Monitoring and Evaluation .32 Project Benefits, Justification, and Risks .32 Project Risks. 34 IV. AGREEMENTS TO BE REACHED AND RECOMMENDATION ............. 35 ANNEX 1 - Statistical Data Tables 1 to 16 .39-60 ANNEX 2: Land Policy Framework .61 Tables 1 to 11 .80-87 Map IBRD 21877 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Page Number Project Implementation Annexes (Volume II) ANNEX 3: Natural Resource Planning and Management Component .... 1 Table 1 ................................................ 16 Appendix 1 to 10 ...................................... 22-40 Figure 1 . . 41 ANNEX 4: Agricultural Production, Credit, 3torage and Marketing & Related Issues .......................... 42 Appendix 1 ............................................ 57 Tables 1 to 15 ........................................ 60-75 ANNEX 5: Agricultural Extension Component . . 76 Table 1.......................................... . 86 Appendix 1 to 6 ....................................... 87-102 Chart 1 ........................ 103 ANNEX 6. Agricultural Research Component ............ 104 Table 1 ........................ 113 Appendix 1 ............................................ 114 Chart 1 ........................ 137 ANNEX 7: Flow of Funds Under Lhe Project ....... 138 ANNEX 8: Santa Cruz Regional Development Corporation - CORDECRUZ ........................................... 140 ANNEX 9: Rural Roads Improvement and Maintenance Component ..... 143 Table 1 to 7 .......................................... 148-154 Map: IBRD 21886 ....................................... 155 ANNEX 10: Componente Desarrollo de la Poblaci6n Nativa .......... L s 56 Table 1 ............................................... 166 ANNEX 11: Selected Documents in the Project File ................ 168  ANNEX 3 Page 1 of 15 BOLIVIA EASTERN LOWLANDS: NATURAL RESOURCE MANAGEMENT AND AGRICULTURAL PRODUCTION PROJECT Natural Resource Planning and Management Component Introduction 1. The Eastern Lowlands of Bolivia are largely contained within the 37,062,100 ha of the Department of Santa Cruz. The Lowlands are of major and growing agricultural importance to Bolivia, as well as an ecologically very sensitive area that will have to be developed with great care to prevent irreversible environmental degradation. In recent years, sizable areas have been deforested (mostly through mechanized land clearing), largely for the mechanxized cultivation of various annual crops. Furthermore, many of the cleared and cultivated lands have been abandoned, due either to crop marketing nroblems or environmental degradation, such as soil compaction, erosion, and waterlogging. 2. The Bolivia Eastern Lowlands Regional Development project seeks to promote environmentally sound and sustainable agricultural development within Santa Cruz Department. In particular, the project intends to promote increased agricultural production (with emphasis on soya for export), while ensuring that development proceeds in an organized and sustainable manner, and that any additional forest clearing is kept to a bare minimum. The Natural Resource Planning and Management Component of the project contains the following Subcomponents: Land Use Planning, Forest Cover Monitoring, Semi-Detailed Soil Studies, Protected Areas, institutional strengthening and the establishment of an Independent Environmental Monitoring Committee. The total base cost (excluding contingencies and local taxes) of the Natural Resource Planning and Management Component would be approximately US$5.0 million (Table 1). Land Use Planning Subcompcnent 3. The praject would support the development, over a two-year period, of a comprehensive Land Use Plan for the Santa Cruz Departmert. The Land Use Plan would be based on a Reconnaissance-Level Soils Map, Agroecological Zoning Map, and five special studies (Protected Areas, Indigenous Lands, Forestry Sector, Livestock Sector, and Water Resources) to be carried out under the Project. 4. Approximately 35Z of the Department's soils have already been mapped at a reconnaissance level (1:250,000); these areas are indicated in Figure 1. The project would support 1:250,000 scale soils mapping for the remaining roughly 652 of the Department (shown in white on Figure 1). 5. The Agroecological Zoning Map would be produced at a 1:250,000 scale and cover all of the Santa Cruz Department. This Map would be developed by combining data from the Reconnaissance-Level Soils Map, temperature and rainfall data, the results of the Protected Areas and Indigenous Lands special studies, and other appropriate data. The land classifications used in the Agroecological Zoning Map (and, hence, by the Land Use Plan) would be approximately the following:  -2- ANNEX 3 Page 2 of 15 (a) Suitable for mechanized field crops. j (b) Suitable for non-mechanized field crops. (c) Natural grazing lands (some with potential for intensive pasture). (d) Suitable for tree or shrub crops, or agroforestry. (e) Suitable for timber ptoduction and extraction of non-timber forest products (latexes, nuts, etc.). (f) Suitable fer extraction of non-timber forest products (but not for logging). (g) Critical watershed area (for hydropower, water supply, or erosion control): Protection forest. (h) Indigenous peoples area. (i) National Park, Biological Reserve, or other strictly protected area. 6. The Protected Areas Study would identify certain wildland areas, delineate them on the Agroecological Zoning Map, and recommend them for protected status (such as new National Parks) within the Land Use Plan. These wildland areas would represent ecosystem types not yet protected in Santa Cruz Department, along with other areas which are high conservation priorities (such as sites with concentrations of endangered species). The Land Use Plan would recommend the area of the Department to be set aside in National Parks and other strictly protected areas (not including multiple-use Forest Reserves); the recommendation should take into consideration the conclusions of conbistent with the Third World Parks Congress and the International Unian for Conservation of Nature and Natural Resources (IUCN) where no less than 10? of the area is recommended. The Protected Areas Study would give special attention to identifying -epresentative potential protected areas within those zones which are currently undergoing rapid deforestation or other significant changes. This study would also review the adequacy of the existing laws and regulations concerning protected areas, and recommend any changes that might be necessary. 7. The Indigenous Lands Study would identify (as accurately as possible) those lands within Santa Cruz Department which are occupied or regularly used by indigenous peoples. It would delineate these areas on the Agroecological Zoning Map, so that these areas could only be zoned for uses which are compatible with the lifestyles of the indigenous groups. The study would also recommend which indigenous lands should be officially designated as reserves or given other special legal status, to safeguard the livelihoods of their inhabitants. The study would also review the adequacy of existing laws and regulations concerning the land rights of indigenous people, and recommend any necessary changes  -3- ANNEX 3 Page 3 of 15 8. Forestry is a very important economic activity in Santa Cruz; in 1988, timber accounted for 23Z of legal agricultural sector exports from Bolivia, while soya was 22Z (although soya is likely to overtake timber in 1989). Approximately 80 percent of Bolivia's commercial timber production comes from Santa Cruz Department. However, the forest industry in Santa Cruz (and Bolivia in general) practices unsustainable forms of logging, including thigh grading'. Although there are more than 150 timber tree species in Santa Cruz Department, only 5 species reportedly account for over 80 percent of the volume logged. The presently most commercially valuable tree species in Santa Cruz Department have already been largely depleted, except from the most remote areas. 9. A Forestry Sector Study would be carried out to address this impending crisis in the forestry sector by identifying the policy reforms and institutional strengthening necessary to transform the forest industry in Santa Cruz into one which practices relatively sustainable forms of logging, rather than high-grading. The study would dovetail with the studies carried out as part of the Tropical Forestry Action Plan in Bolivia and, inter alia would examine issues related to the structure and levels of stumpage fees, the terms of logging concessions, the specific institutional strengthening needs of CDT-UTD, and the adequacy of existing forest management laws and regulations. This study would also identify opportunities through which the foreign exchange earning capacity of the forestry sector could be increased in an environmental sustainable manner, through mechanisms such as increased local processing and value-added, utilization of a greater variety of timber species, and the use of more efficient sawmills and other wood-processing technologies. The study would also identify the technical requirements for conducting environmentally sound timber harvesting within the three existing Forest Reserves in Santa Cruz Department: Chor-, Guarayos and Bajo Paragua. This study would lay the groundwork for possible future World Bank/IDA investment in the forestry sector in Santa Cruz. 10. The Livestock subsector study would evaluate in particular the growth potential of small livestock, such as pigs, poultry, goats, rabbits, and aquaculture. In the case of cattle production, the study would emphasize ways in which cattle can be raised in Santa Cruz Department without significant deforestation. Particular att ntion would therefore be placed on identifying the potential of natural grazing lands (such as the drier Chaco zone and the extensive natural savannas of Alto Paragua), which can be grazed without removing trees and shrubs. For cattle raising on lands which naturally support forest (such as most of Project Zones A, Bl and B2), the study would assess the potential for intensive dairying, which could generate relatively high income and employment per hectare of (deforested) land. 11. The Water Resources Study would evaluate the existing freshwater (surface water and groundwater) resources of Santa Cruz Department, in terms of their potential for supporting irrigation, hydropower (particularly in the Andean foothills), and domestic and industrial consumption. The study would qualify the economically feasible, near-term potential for the irrigation of existing agricultural lands (which could increase agricultural output without additional land clearing). The study  -4- ANNEX 3 Page 4 of 15 would identify existing water quality problems (inclucing groundwater contamination), as well as possible higb-priority investments for improving water quality (along with an estimate of their cost). It would also identify the nature, sev'erity and general locations of the most significant watershed management problems in Santa Cruz Department (particularly in the Andean foothill zone), and provide specific proposals for correcting them. The study would also review the adequacy of existing water use laws, regulations, and institutions in Santa Cruz Department, and recommend changes that may be necessary. 12. The consultants for all five of these special studies would be based in CORDECRUZ, although they would be expected to work closely with other relevant Government agencies. (For example, the Protected Areas and the Forestry Studies are expected to work closely with CDF-UTD, especially the Departamento de Vida Silvestre.) Basing all of the consultants within CORDECRUZ will help to maximize the coordination, and minimize the conflicts, between their respective studies; this should produce a more coherent and internally consistent Land Use Plan. 13. The project would finance two seminars as part of the land use planning process. The first, to be held after about one year, would be for 4 days of technical-level discussions to address preliminary findings and provide recommendations for completing the Land Use Plan. The second seminar, to be held at the end of Year 2, would be for 3 days of policy-level discussions with Government officials, in order to identify and promote effective policies for implementing the Land Use Plan. Both seminars would be attended by a Bank/IDA supervision mission. 14. The project would finance the hiring of a Land Use Regional Planning consulting firm which over a period of 2 years would be responsible for carrying cut, coordinating and overseeing all of the elements of the Land Use Planning Subcomponent, including the Land Use Plan report, Reconnaissance-Level Soils Map, Agroecological Zoning Map, all of the special studies, and both seminars. The consulting firm would seek to ensure that all of these elements are consistent with one another and mutually reinforcing. The Bolivian counterpart of the Land Use Plan/ Regional Planning firm would be the head of the new Natural Resources Department of CORDECRUZ (para. 34). 15. Probably the most difficult part of this land use planning process would be ensuring that the Land Use Plan and Agroecological Zoning Map, j once agreed upon, are used as intended in the planning and approval of future development activities in Santa Cruz Department. IDA should reach agreement with the Government on the need to introduce mechanisms to ensure the use of the Land Use Plan as the guiding instrument for development in Santi Cruz by all national and international agencies. The Borrower would provide assurances to IDA that it would follow closely the recommendations of the ag-eed Land Use Plan, and that it would avoid supporting any development activities (especially new roads, land titling, or agricultural credit) in inappropriate areas, as determined by the Agroecological Zoning Map. 16. Under the project, 500 copies of each sheet of the final Agroecological Zoning Map and Reconnaissance Level Soils Map, and 1,000  -5- ANNEX 3 Page 5 of 15 copies of the Land Use Plan report (including all of the special studies as chapters) would be printed and made available to the public, as well as Government and international agencies. The total base cost for the Land Use Planning Subcomponent, including the Land Use Plan, Reconnaissance;-Level Soils Map, Agroecological Zoning Map, and special studies and seminars would be approximately US$2 million (Table 1). Forest Cover Monitoring Subcom.ponent 17. There is considerable debate concerning actual rates of forest clearing in Santa Cruz Department; estimates range from 20,000 ha/year to substantially higher. The Forest Cover Monitoring Subcomponent is intended to provide accurate information on forest cover and deforestation rates within the Department, and to monitor deforestation rates after Project implementation begins. Such monitoring will help ta ensure that the Project's objective of minimizing further deforestation is achieved. With the monitoring program, it will also be possible for CDF-UTD, CORDECRUZ, and other relevant agencies to identify and respond appropriately to illegal deforestation activities; these could include, for example, deforestation within protected areas, or without the buffer strips for windbreaks and watercourses specified by the CI.T (1989) guidelines (Appendix 2). 18. The forest cover monitoring would utilize Landsat Thematic Mepper (TM) imagery to identify areas of forest, secondary growth, agriculture, and other land uses. Baseline ("Year 0) monitoring for the entire Department is being done under a Project Preparation Facility (PPF) financed by IDA; the completion of this baseline work would be a condition of IDA Credit disbursement. The project would support monitoring of the entire Santa Cruz Department every other year (i.e., in Years 2 and 4 of the Pron4rti. involving the purchase of 17 TM images to cover the Department. Every alternate year (Years 1, 3, and 5) the project would provide for the purchase and analysis of 6 (rather than 17) TM images, to cover pre-selected deiorestation "hotspots" within the Department. The satellite data would be converted into maps indicating forest cover and other land uses (including recently def-rested areas) on a 1:250,000 scale. The project would finance the printing and distribution of 800 copies of each map sheet each year; the maps would be provided to Government and international development agencies, as well as to NGOs and interested members of the public. 19. The lead agency for the Forest Cover Monitoring Subcomponent would be CORDECRUZ, because of its lead role in thie Project and inL land use planning for the Department. However, close coordination would be maintained with CDF-UTD, the agency with prime responsibility for forest (as well as protected area) management in Santa Cruz. The total base cost for the Forest Cover Monitoring Subcomponent would be approximately US$320,000 (Table 1).  -6- ANNEX 3 Page 6 of 15 Semi-Detailed Soil Studies Subcomponent 20. Under the PPF, semi-detailed soil studies (with soil types evaluated at a 1:25,000 scale and published on v 1:50,000 scale map) of Project Zones Bi and B2 are being done in 1989. Using the resulting data, the Natural Resources Department of CORDECRUZ would screen all applications for official agricultural credit (or, at least, that credit which is IDA-financed under this project). The Department would approve credit applications only for those farms with soils that are appropriate for the activity planned (Class IV or better in the case of soya production). Publication and widespread distribution of the 1:50,000 soil maps would help to discourage possible corruption in the process of approving farm credit applications on the basis of soil quality. Interested observers would be able to corroborate that CORDECRUZ's Natural Resource Department is approving cr denying credit applications according to the actual soils data; th'ese observers could be higher-level CORDECRUZ officials; staff of CIAT, MACA, CDr-UTD, or other interested Government agencies; members of the Independent Environ-mental Monitoring Committee (described below); and World Bank supervision staff. 21. The project would support semi-detailed soil studies in Year 4 of up to an additional 800,000 ha, located within areas identified as pctentially suitable for Pgricultural expansion in the Land Use Plan, Agroecological Zoning Map, and Reconnaissance-Level Soils Map. Priority would be given to potentially suitable lands that are near existing infrastructure, such as the Santa Cruz-Puerto Suarez railway; one possible area for study mighet be the Rio Tucavaca valley. The terms of reference for these semi-detailed soil studies would closely parallel those for the soil studies being carried out under the PPF. However, it should not be necessary to use local consultants (which were used in the PPF) in the Ye..r 4 to carry out the semi-detailed soil studies, because there will be an a4equate number of qualified in-house staff at CORDECRUZ (due, in part, to the institutional strengthening subcomponent described paras. 33-38). Total baseline cost of the subcomponent is estimated at US$1,789,3C0 (Table 1). Protected Areas Subcomponent 22. This Subcomponent seeks to strengthen the on-the-ground management of existing National Parks, Forest Reserves, and other legally protected areas in Santa Cruz Department. This support for protected wildlands is in accordance with the World Bank's Wildlands Policy (OPN 11.02), which promotes support for the establishment or improved itanagement of protected wildlands, in part to help compensate for any further forest clearing which may result (even indirectly) from project-supported agricultural development in Santa Cruz. The project would restrict agricultural credit and rural road development within and near three existing protected areas that overlap with the project's identified agricultural production zones (para. 23). Furthermore, the project would finance a number of activities, totalling approximately US$622,850 over five years (Table 1) to strengthen the management of protected areas in Santa Cruz Department. The lead agency for the Protected Areas Subcomponent is CDF-UTD, which manages public  -7- ANNEX 3 Page 7 of 15 protected areas in Santa Cruz Department. In the special case of the Noel Kempf Mercado National Park (paras. 30-31), the lead agency is the Park administration itself, governed under a special agreement (convenio) between CDF-UTD and CORDECRUZ. 23. Three existing protected areas overlap to some degree with the project's agricultural production Zones A, Bl, or B2: (a) The southeast corner of th' 900,000 ha Chore Forest Reserve overlap- with Project Zone A. The nearest existing inechan'-ed agricul,ure (a Menonite colony) appe rs to be about 10 km away from the edge of the Reserve; (b) The recently-established Santa Cruz La Vieja National Historical Park (17,080 ha) encompasses the ruins of the original Santa Cruz settlement, along with a mountainous ridge covered with chaco vegetation, just south of the town of San Jose de los Chiquitos within Project Zone B2. The Park's mostly hilly terrain is unsuited for soya or other me^hanized agriculture; and (c) The Lomas de Arena Regional Park (13,325 ha) lies on the southern outskirts of the city of Santa Cruz and is an important weekend recreatiornal area for urban visitors. While the Park itself is not threatened by agricultural encroachment, the enormous sand dunes contained within the Park are gradually expanding and shifting to -he south, presently threatening the agricultural land of a Menonite colony. CDF-UTD, which administers the Park, wishes to reforest a buffer strip along the Park's southern boundary, in an effort to halt the southward spread of the dunes. 24. To ensure that the project would not inadvertently further damage any of these protected areas, any official agricultural credit would be prohibited within the boundaries of these protected areas (since they still contain some private landholdings). Within a 5 km bu,fer zone on the edge of each protected area, agricultural credit would be made available only for forestry or agro-forestry purposes and would require the special approval of CDF-UTD. In the case of Santa Cruz La Vieja National Historical Park, official agricaltural credit within all of Zone B2 would be restricted to the lands north of the Santa Cruz-Puerto Suarez railway (which makes a suitable dividing line for a Park "buffer zone"); exceptions could be provided only for forestry or agroforestry purposes, and then only with the approval of CDF-UTD. (Virtually all of the Zone B2 lands potentially suitable for soya or other mechanized, rain-fed agriculture lie to the north of the railway.) Also, no rural road construction or improvement would be allowed within any of these protected areas or their respective buffer zones, except with the express authorization of CDF-UTD. 25. Training of Protected Area Managers. Training is of fundamental importance in ensuring proper on-the ground management of the legally protected areas in Santa Cruz Department, including National Parks (Parques Nacionales), Biological Reserves (Reservas Biologicas), and Forest Reserves (Reservas Forestales). Protected area guards, managers, and higher-level administrators need to be competent and well-trained to be able to carry  -8- ANNEX 3 Pabe 8 of 15 out their functions effectively. *o improve the management of the existing and future protected areas in Santa Cruz (and, to some extent, throughout Bolivia), the project would finance a study to determine the feasibility of establishing a Wildland Management Training Center and to propose a detailed blueprint for its establishment (training curricula, source of trainers, management, etc.). If the study demonstrates the long-term feasibility (technical, financial and managerial) of the facility, the project would also finance its construction and 1002 of the operat4.ng costs from Year 3 of the project onwards. This facility would be based at Amboro National Park, which is a good location because of its great diversity of ecosystems and wildlife, its (rather typical, although manageable) problems related to incompatible humaa activities within and near the Park, and its close proximity and relatively easy access to the city of Santa Cruz. The Training Center would train protected areas staff at basic (guard) and letermediate (manager) levels. Subjects to be taught would include the basics of protected araa protection, management, and administration; field biology; census-taking and related skills; and environmental education and extension to local people. The most promising graduates would be recommended for overseas study for master's degrees. Students participating in t4e training program would come largely from biology or similar backgrounds, from Santa Cruz and (to some extent) from other Departments. It is expected that some of the students of the Training Center would go on to careers other than protected area management, such as environmental assessment consulting. Additional aspects el the proposed Training Program are described by Cox (Appendix 2). 26. Besides financing the establishment and initial operation of the Training Center at Amboro (assuming the study so warrants), the project would support training by funding 20 scholarships per year for study at the Amboro Training Center. The project would also support a total of eight master's degrees (each involving 2 years of foreign study) over the life of the Project. There would also be some funding to enable higher- level protected area managers to attend international conferences o.' wildland management and related topics. 27. Management of Amboro Nationial Park. The Amboro National Park is located just west of Project Zone A, northwest of the City of Santa Cruz. It currently encompasses 180,000 ha, although there are plans for its expansion to the west and south. Because it protects a wide range of elevation zones and different forest types at the edge of the Andes, the Park is extremely diverse biologically, and provides the last stronghold for many seriously endangered animal and plant species. Amboro is a particularly important protected area for this project to support because it is the most threatened existing National Park in Santa Cruz Department, because it is within the project's general area of influence (lying immediately west of Zone A), and because the Park's lowland tracts protect some of the same forest types that are presently being cleared for cultivation within the project area (particularly "Subtropical Humid Forest", as defined in the Holdridge Life Zone Classification System). The Park is receiving a variety of assistance from IDB and USAID projects, which are expected to finance on-the-ground demarcation, guard stations, vehicles, other basic protection measures, along with the development of a management plan and some facilities for nature tourism.  -9- ANNEX 3 Page 9 of 15 28. Since a concerted protection program for the Park began in 1986, new agricultural colonization has been effectively stopped, and logging concessions have been canc?lled. The Park now also has considerable support among local political officials. The main unresolved issue concerning the Park's protection is the continued presence of about 800 small farmer families within the lowland portion of the Park, who moved in prior to 1986. A majority of these colonists practice slash-and-burn agriculture, on a scale which is completely incompatible with the Park's forest conservation objectives. Because the people living within the Park lack access to many services, including roads, schools, health clinics, and agricultural credit, a sizable majority have expressed support for being resettled, according to a census recently financed by USAID. 29. The Project would therefore support a study to prepare an Action Plan for the eventual resettlement of most of these 800 families. (A small number could remain to assist with Park Protection). The Action Plan would identify specific alternative parcels of land in Santa Cruz Department to which people from the Park would be voluntarily willing to resettle, either as individual families or as cooperatives (sindicatos). These lands would be of good agricultural quality (no worse than the Park lands presently being occupied), and would largely be provided through the Instituto de Colonizacion, Banco Agricola Boliviano, Banco del Estado, and Instituto de Reforma Agraria (to minimize any need for purchasing of private lands). The Action Plan would also indicate the specific improvements or services needed for each resettlement area (such as roads, schools, health clinics, agricultural credit, and water supply), to make the new lands attractive to the settlers and to ensure that these people are no worse off (and preferably better off) than if they were living inside the Park. The Plan would also identify which of the families to be resettled would require (or be legally entitled to) a "resettlement allowance" cash grant, and would specify the amounts of money involved. It would outline a prioritized timetable and specific budget for the resettlement, and would identify possibly sources of funding for the resettlement effort (presently estimated to cost roughly US$2-5 million). 30. Management of Noel Kempff Mercado National Park. The Noel Kempff Mercado (formerly Huanchaca) National Park encompasses 914,000 ha and is presently the largest National Park in Santa Cruz Department. Owing to its remoteness, it is not seriously threatened at present by colonization or large-scale deforestation. However, a number of logging concessions and sawmills are located just outside the Park (within the Bajo Paragua Forest Reserve). Also, Brazilian settlers living across the Rio Guapore (an international boundary) frequently enter the Park for commercial fishing and some hunting. The Noel Kempff Mercado (NKM) Park is administered under a special convenio between CORDECRUZ, CDF-UTD, the Universidad Autonoma Gabriel Rene Moreno, and the Alcaldia Municipal of Santa Cruz city. Under this agreement, CORDECRUZ has been paying for the Park's recurrent operational costs. USAID has also financed certain basic Park infrastructure, particularly guard posts and staff housing. However, certain other investments are needed to ensure a high standard of protection for the Park. The project would finance the remaining land boundary demarcation needed for the Park, as well as demarcation of the vulnerable northern boundary of Laguna La Bahia, a biologically important  -10- ANNEX 3 Page 10 tf 15 wetland. The Laguna comprises the 22,000 ha NKM Biological Reserve, which is located outside of the NKM National Park, but has the same administration. The project would also finance motorized canoes to improve patrols of the Rio Guapore, vehicles to patrol the west boundary of the Park (to protect against logging incursions), radio communications to aid patrols, and a variety of necessary field equipment. 31. Because of its many waterfalls, still abundant large mammals, and other spectacular scenery, the NKM Park offers significant potential for the development of nature-oriented tourism. The Project would therefore support a study of the Park's tourism development potential, in terms of its attractiveness to international visitors as well as Bolivians. The study would estimate potential tourist demand, as well as the infrastructure, facilities, and transportation and other services that would be needed to attract and properly accommodate increased tourism. The study would estimate the potential of tourism revenues for covering some (or possibly all) of the recurrent costs of Park management, and for providing foreign exchange. The study is expected to propose some type of tourism development program for the Park, to proceed in a number of stages over the next several years. 32. Management of Chore Forest Reserve. The 900,000 ha Chore Forest Reserve is one of three existing production Forest Reserves (Reservas Forestales) within Santa Cruz Department. Although it has undergone considerable commercial logging (and much of the forest has already been high-grad4d), the Reserve is still roughly 80-85 percent ferested. The remaining 15-20 percent of the Reserve is occupied by colonists, many of whom practice slash-and-burn agriculture, mostly along the Reserve's eastern and southern edges. The project would finance a detailed census of the people living within the Reserve, as the first step in CDF-UTD's formulation of a plan for addressing the conflict betwee.. the activities of the colonists and the objectives of the Reserve (through either resettlement or adequate land use regulation, possibly coupled with technical assistance). Details on the planned implementation of the census are provided by Mancilla (Appendix 2). Natural Resources Institutional Strengthening of CORDECRUZ 33. Until recently, natural resource management within CORDECRUZ was the responsibility of the Seccion de Recursos Naturales of the Departamento de Estudios Basicos of the Unidad de Planificacion y Proyectos (UPP). The section was theoretically entrusted with a broad range of responsibilities involving management of the environment and natural resources. In practice, however, the Natural Resource Section's effectiveness was seriously limited by its very small size and its low position (and consequently little influence) in CORDECRUZ's organizational hierarchy. It was therefore very difficult for this Section to influence significantly the large volume of CORDECRUZ's work that in some way affects (or is affected by) natural resource management. 34. The new Administration in CORDECRUZ has upgraded the section to the level of full Department within UPP. While eventually natural resource management in CORDECRUZ should be upgraded to a Unit level status, the  -11- ANNEX 3 Page 11 of 15 present arrangements would be acceptable provided the staffing of the new Department is strengthened (para. 38). However, the final status of the group would be reviewed in the context of the ongoing study by international consultants to restructure CORDECRUZ and under the project, by December 31, 1991. The Department/Unit would be responsible for implementing the Land Use Plan and other elements of the Project's atural Resource Planning and Management Component (except for the Protecti. Areas Subcomponent, for which the lead agency would be CDF-UTD). Over the long- term, the new Department/Unit would oversee the natural resource management aspects of other projects administered by CORDECRUZ, to help ensure that they are also carried out in an environmentally sustainable manner. The new Department/Unit would also assist the work of other CORDECRUZ units (particularly UPRA and UPP) by providing them with essential natural resource and environmental information. 35. It is proposed that the eventual Natural Resources Unit of CORDECRUZ would have three Departments. The Depaitment of Land Use Planning would be responsible for activities such as: (a) Planning and implementation of the Land Use Plan; (b) Screening of agricultural credit applications based on soil quality and agroecological zoning considerations; cc) Formulating natural resource management policy for CORDECRUZ; [d) Distribution of envirw.azmental and natural resources information to other agencies and to the public; and Ce) Coordination of agricultural land use planning with MACA; 36. The Department of Environmental Management would be responsible for activities sucL as: (a) Environmental impact assessment of projects administered or supported by CORDECRUZ; (b) Socio-economic impact assessment of CORDECRUZ projects on indigenous peoples or other vulnerable social groups; (c) Acquiring and maintaining information on threatened biological resources (species and ecosystem types) in Santa Cruz Department (in coordination with the Centro de Datos para la Conservacion in La Paz), and ensuring that this information is properly used in CORDECRUZ's planning of development projects; and (d) Coordination with CDF-UTD on issues related to forestry or proteetad area management. 37. The Department of Water Resources would be responsible for activities such as: (a) Management of groundwater resources;  -12- ANNEX 3 Page 12 of 15 (b) Management of critical watersheds (particularly in the Andean foothills of Santa Cruz), in coordination with MACA and CDF-UTD; (c) Irrigation planning and management (in coordination with MACA); and (d) Agro-meteorological services (in coordination with SENAMHI and AASANA). The latter Department could be located within the Natural Resources Unit, or (alternatively) within UPRA. 38. The minimum number (6) and specialties of the new staff that the Natural Resources Department/Unit should have to function effectively (not including support staff such as secretaries) is indicated below. it is proposed that the IDA Credit would assist CORDECRUZ in properly staffing the new Natural Resources Department by financing the salaries of these six new staff according to the following declining formula: 100l in Year 1, 502 in Year 2, and all CORDECRUZ thereafter (Table 1). To ensure that these new staff are properly qualified, IDA would review the resumes of the candidates selected, prior to their being hired. Minimum New Staff Required for Proper Functioning of CORDECRUZ's Natural Resources Unit (not including support staff) Department of Land Use Planning: 1 ecologist or natural resource s-ecialist 1 agro-ecologist or land-use planner (In addition to 1 soils and photo interpretation specialibt, 1 soils agronomist. 1 cartographer, and 1 geologist presently in the Natural Resources Section.) Department of Environmental Management: 1 ecologist or environmental assessment specialist 1 anthropologist or sociologist 1 conservation biologist (zoologist or botanist) Department of Water Resources 1 forester or vwAtershed management specialist (In addition to 1 hydrologist presently in the Natural Resources Section, and 1 agronomist presently in UPRA.) Total New Staff to be Hired: 6  -13- ANNEX 3 Page 13 of 15 Independent Environmental Monitoring Committee 39. CORDECRUZ would be responsible for monitoring and evaluation of the project and would supply IDA with an annual report including environmental progress. Tn addition, IDA and the Borrower would agree to carry out an annual independent review of the situation to help provide early warning of potential environmental problems in time to avert them, and to advise on the overall environmental status in general. Such early warning and status reviews will assist the Borrower in course corrections and prevention of problems. 40. The yearly review of the environmental status of the project would be carried out for the life of the project by a committee which will be external to and independent of the Borrower. The committee will have three elements. First, the Secretariat and convenor of the committee will be the representative of the National Academy of Sciences (NAS) or an entity designated by the new Vice-Ministry of Environment (in MACA). The role of MACA would be to help select the committee with IDA assistance, promote continuity and permanent liaison with the Borrower, and promptly replace non-functional committee members. NAS will be a full member of the committee and will be responsible for the official reporting. Second, three high-level internationally recognized environmental technical experts, pr^bably one from Latin America, one from North America, one from Europe. Third, one Bolivian NGO. At least one committee member would focus on the social and anthropological aspects. Continuity of membership is essential, therefore each should agree to serve in principle for a minimum of 5 years. 41. The committee would spend approximately seven days in Santa Cruz annually. The Borrower would supply the members with their annual report no less than 30 days before the committee convenes which should be approximately the same time each year unless there are seasonal phenomena to be observed. The committee would leave their report with NAS before departure. NAS would obtain the Borrower's comments, especially their proposals to accommodate the committee recommendations, within 30 days of their departure, and will promptly send both the committee report and the Borrowers comments thereon to IDA. 42. All expenses would be included in total project costs and would be financed under the project. Professional fees would be paid only in the case that it proved impossible to obtain high level experts on any other basis. Terms of reference for the committee would be drawn by negotiations. Environmental Conditionality